Dealership service centers across America are raking in cash for auto dealers and industry-wide, this March was the best in the last five years in terms of revenue. This was achieved despite repair order volumes that were strong, but lower than in previous years.
The service centers at dealerships were busy in March, with an average of 89.4 service orders received last month, a 15 percent increase from the previous month, according to data collected by Cox Automotive.
Despite this increase in service orders, there has been an overall downward trend in repair volumes since 2021. This trend may be a result of the pandemic, which forced owners to repair vehicles when new ones couldn’t be found. As a result, service orders are down 4.3 percent as compared to March 2022, and 8.2 percent as compared to March 2021.
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Although repairs rates are falling, service order revenue continues to rise. Fortunately for dealers, as consumers have needed to visit the dealer less often, each visit has become more expensive, because revenue growth has outpaced service volume shrinkage.
In March 2023, the average revenue for each repair reached $132.90. In March 2022, it was $126 (5.1 percent lower), and in March 2021 it was $112.50 (15.3 percent lower). Meanwhile, in March 2018, the average revenue was just $97.50 (26.6 percent lower).
“The March ticket volume was lower than we have seen in previous years, but higher service costs pushed total service revenue per dealership to a record high for any March in the past five years,” said Jonathan Smoke, Cox Automotive Chief Economist.
That’s good news for dealers, but not so good for drivers. Although it seems that they have to visit the dealership less frequently, it will sting more every time they do.
